Chiropractic board, attorney general's office at odds over fraud case

Article by: ALEJANDRA MATOS

Star Tribune

October 7, 2013 - 2:08 PM

The Minnesota Board of Chiropractic Examiners accused Attorney General Lori Swanson of a “backstab” and throwing them “under the bus” after her staff criticized the board’s decision to reinstate a Twin Cities chiropractor who was twice convicted of fraud.

The conflict between the two offices stems from the board’s decision in 2011 to issue a license to Dr. Randy Miland. That move outraged victims of Miland’s illegal investment schemes, who said they’re still waiting for thousands in restitution payments ordered by the court.

One of his victims filed a complaint with Swanson, who responded with a letter to the board in January 2013 strongly urging them to reconsider the conditions of Miland’s license.

But Dr. Larry Spicer, the board’s executive director, said the board was following the legal advice from Swanson’s office when it reinstated Miland’s license two years ago. Those attorneys, who advise and represent the board on all licensing decisions, never said the board could deny the license or place a condition that required restitution for the victims, Spicer said.

“That is not what we were told at all,” said Spicer, who said the attorneys told them that it was “not the position of the board to enforce the criminal court’s requirements. That is beyond the authority of the board, is the information we were given.”

Ben Wogsland, the attorney general’s spokesman, said the board had the authority to deny Miland’s license.

“It’s very clear that even if they decide not to continue to have it suspended, they can put terms and conditions on it,” Wogsland said.

Theft by swindle

In 1999, Miland was convicted of theft by swindle after investors, including some of his patients, gave him money to invest in a Blockbuster franchise. The board suspended his license, and Miland served time behind bars. In 2006, Miland got a federal prison term after being convicted of wire fraud.

The board gave Miland a probationary license in 2011, and in December he will be able to petition for an unconditional reinstatement of his license. The rift between the board and Swanson’s office began with her letter in January, and then a July Whistleblower story in which Wogsland publicly questioned the board’s decision to relicense Miland.

On Sept. 5, the chiropractic board and Swanson’s staff met to talk about the situation. Members of the board expressed a loss of trust with their legal counsel, but representatives of Swanson’s office said the attorneys are there to provide legal advice, and it’s the sole responsibility of the board to decide what happens to someone’s license.

At the meeting, board members said the public comments from the attorney general’s office contradicted the advice their attorneys gave them behind closed doors. Whistleblower obtained a recording of the meeting.

“What I’m upset about is now the attorney general’s office becomes the people’s attorney and sort of backstabs us. That’s where I’m coming from. That’s the part that bothers me,” Dr. Ralph Stouffer told the attorneys. “Now I have an attorney general that is an attorney for the public and not an attorney for me as a board, and that’s where I’m having big issues. That has changed the parameters of our relationships and the whole paradigm has shifted.”

Karen Olson, the deputy attorney general that oversees licensing board attorneys, responded by saying Swanson speaks for the policy of the state, first and foremost.

“The end issue is yes, the attorney general disagreed with you and you could easily have taken the position ‘That’s OK, we made that decision,’ ” Olson said. “The conflict came by trying to say it was a joint decision, and it’s not a joint decision. It’s not the first time the attorney general of this state has disagreed with the decision of an agency.”

At the meeting, Spicer said that back in 2011, the attorneys told the board they should reinstate the license because the Criminal Rehabilitation Act, a state law, required that Miland get his license back since he had given sufficient evidence that he was rehabilitated and met the conditions of his suspension and probation.

‘Changing her mind’

“Now the feeling is that the attorney general is changing her mind or is almost pretending they weren’t in the room with us, giving us advice. The concern is that happened in a public venue, the throwing of the board under the bus, that was in the press,” Spicer said. “It made it seem like the attorney general is going … ‘How can they possibly do that when they were right there with us?’ ”

Olson and Kermit Fruechte, an assistant attorney general, assured the board they were receiving adequate legal representation and offered to answer any legal questions that the board has in the future, especially related to the Criminal Rehabilitation Act.

In an interview, Spicer said he agrees that the board is the ultimate decisionmaker, but said those decisions are always made with the advice of their attorneys in the back of their mind because if they deviate from that advice, the board may be “stepping out on a limb for which there is no support.”

“If they make a decision that is contrary to the AG’s advice, then they are put in a situation that they have to defend that position in court, even at the Supreme Court level. If that is the case, then the attorney general can decide if it will defend or not,” Spicer said. “For the board to make a decision that is contrary to the AG’s advice is a very dangerous move.”

When asked if the attorney general’s office would have defended a decision to deny Miland’s license, or place conditions of restitution, Wogsland said, “Absolutely.”